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Outcome Based Medicine: Definition & Hidden Perils

The concept of outcome-based medicine is increasingly viewed as critical to the future of the American healthcare system. Outcome-based medicine featured prominently in the debate surrounding the drafting and implementation of the Affordable Care Act, and continues to play a role in discussions of healthcare policy in health systems and among local, state, and federal government bodies. Patients and providers alike would do well to review the concept, its benefits and potential perils that could counteract any perceived advantages.

What Is Outcome-Based Medicine?

Outcome-based medicine is as it sounds: a system of medical care delivery that emphasizes positive patient outcomes. In the United States, outcome-based medicine further describes a payment model in which providers are purportedly compensated in a manner that incentivizes quality care delivery and positive patient outcomes, rather than providing flat payments for services rendered (the status-quo arrangement for U.S. healthcare).

It is important to note that outcome-based medicine is not evidence-based medicine, which describes a clinical approach rather than a reimbursement system. Evidence-based medicine is widely regarded as a best practice for medical providers across the specialty spectrum and is not a subject of serious debate within the community.

Perceived Benefits

Though some may seem obvious, the perceived benefits of outcome-based medicine bear repeating:

Enhanced trust between patients and providers (i.e. patients do not assume that doctors are simply rendering services to pad billings)

More emphasis on preventive care and minimally invasive interventions

Hidden Perils

It is worth exploring the hidden perils of outcome-based medicine as well. In many cases, and perhaps in systematic fashion, these perils may outweigh any perceived or real benefits of an outcome-based approach.

In particular, outcome-based medicine raises a substantial moral hazard. Providers are not omniscient and can’t know to any degree of certainty — other than what they can directly observe in a clinical setting — what their patients are doing when they’re not being monitored.

This is particularly problematic for patients whose recommended treatment courses require proactive (or simply active) work on the part of the patient. For instance, a patient who fails to take a necessary medication and subsequently suffers an adverse outcome may indirectly affect his or her provider’s reputation and income through no direct fault of the provider.

As of yet, there is no systematic answer for this moral hazard. Given what we know about human nature, it seems unlikely that one will arise in the foreseeable future. This, in a nutshell, is the Achilles’ heel of outcome-based medicine — and an indication that, at minimum, the medical community must carefully weigh the obvious need for positive outcomes against the potential risks of blithe adherence to a particular compensation framework. There is a significant risk that patients with lower income and more complex problems will be discriminated against and lose access to care.

A Changing Medical Landscape
The platitude “the only constant is change itself” applies perfectly to the concept of outcome-based medicine. Even the most astute and well-prepared observers remain unsure as to how the concept will develop and change in response to new governmental directives, changing modes of care and other factors — some of which may be unknown to us at present. That said, patients and providers must prepare themselves mentally and professionally for a future in which medical care looks very different — and produces very different results — than it does currently.